Perth fair-lovers have taken advantage of the city’s trains being back on schedule, with thousands turning out to the Perth Royal Show this morning.

The show’s organisers have reported strong crowds so far on the opening day of the Show and, with the day expected to stay sunny and topping 26C, between 50,0000 to 60,000 are expected to flow through the gates.

“It was fantastic that the trains were running on schedule and we’ve had a lot of people entering through the train entrance, so they are obviously taking advantage of the public transport,” Royal Show spokeswoman Maryanne Shaddick said.

A pay dispute between train drivers and the Public Transport Authority threatened public transport to the Show when drivers called in sick in their masses yesterday, drastically reducing train services.

However, a deal was reached last night when drivers agreed to an interim wage rise of 5 per cent on the condition that the industrial action stopped immediately.

The show runs until October 2 but more than half of all show-goers attend over the long weekend, with Monday traditionally the busiest day.

The weather is expected to stay mostly sunny tomorrow, with a maximum of 23C, and a partly cloudy 25C on Monday. Those attending the Show today will be treated to a shearing and wool-handling competition.

New Housing Minister Bill Marmion has shocked the property market by saying he wants to flood WA with housing lots to cut home prices.

In a speech to Parliament that has set alarm bells ringing throughout the real estate industry, Mr Marmion said the Barnett Government’s aim was to “bring house prices down”.

“The Department of Land is looking at this issue very closely,” he said.

“It owns land and it is looking at its land stocks and will release as much land as possible.

“That will reduce the pressure on housing supplies. Our aim is to bring the median house price down and to have it lower than the median house price in other States.”

Mr Marmion, who took over the job last month after Troy Buswell was sacked, said the only thing the Government could do to achieve its aim was “release more land and houses”. He refused to elaborate on his comments yesterday.

March quarter figures from RP Data put the median house price in Perth at $480,000, equal to Darwin, but behind Sydney ($500,000) and nation-leading Canberra ($510,800).

Hobart had the cheapest prices in Australia at $323,750.

The State Government established an Office of Land and Housing Supply in Thursday’s Budget and is reviewing available government land which Premier Colin Barnett said would “achieve a comprehensive and co-ordinated approach to housing affordability issues”.

Shadow housing minister Mark McGowan warned the policy could result in houses being worth less than what people paid for them.

“If people go into negative equity with their house, that’s the worst possible outcome,” he said.

Real Estate Institute of WA chief executive Anne Arnold said Australians stored their wealth in the family home and it would be “politically unwise for any government to go down that path”.

But the plan won support from developer Nigel Satterley, who said land needed to become more affordable.

But he said the policy would not cut the price of existing houses.

“We’re on the cusp of a block shortage and whatever the Government can do should be encouraged,” Mr Satterley said.

Analysts at RP Data found in April that houses in Perth’s cheapest suburbs cost at least $60,000 more than those in the most affordable areas in the other major Australian cities.

Hillman was named the cheapest suburb in Perth, with a median house price of $280,000 – higher than the cheapest suburb in Adelaide ($200,000), Brisbane ($205,000), Melbourne ($218,000) and Sydney ($219,000).

Perth had less than 10 per cent of its 259 suburbs with a median house price under $350,000, compared with more than 20 per cent in all other big cities.

Blocks of land in Perth were the most expensive in Australia, according to a recent analysis by RP Data and the Housing Industry Association, with a single square metre of “prime earth” now costing an average of $521.

Meanwhile, the Urban Development Institute of Australia said its own research showed a six-month delay in planning approval could add 7 per cent to the price of an average block in the metropolitan area.

UDIA WA chief executive Debra Goostrey said developers were doing what they could to ensure “affordable” land was being made available during a time of increasing prices.

“We also need the support of a fast and efficient planning approvals process to avoid costs associated with delays,” she said.

One in two West Australians believes there will be greater skills shortages and more pressure on house prices compared with the last mining boom, the latest Westpoll has found.

The results revealed 53 per cent of those surveyed thought there would be more pressure on a housing price bubble and skills shortages than last time, while 32 per cent believed there would be the same level of pressure.

Just 9 per cent of those polled said there would be less pressure.

“There is a clear community expectation that there will be quite severe skills shortages in WA and, perhaps of greater concern, a view that there will be an upward pressure on housing prices,” pollster Keith Patterson said.

“This may lead to significant levels of speculation in housing in the anticipation that values will surge as the resources boom unfolds.”

Australian Manufacturing Workers Union secretary Steve McCartney said the community was right to be concerned about increasing prices.

“I think lower paid members of our community should be concerned because sometimes the benefits of those booms don’t filter down to the low-paid workers,” he said.

Construction, Forestry, Mining and Energy Union spokesman Gary Wood said he did not believe there would be more pressure as the WA economy improved.

“There might be the perception put out by the likes of the employer associations so they can attempt to justify the use of overseas labour but it needs to be fully demonstrated they are not just a propaganda war to bring in overseas labour,” he said.

Opposition Leader Eric Ripper said the Government needed to demonstrate a sense of urgency over labour supply, training issues and housing.

“The experience of the last boom was that house prices rose and rents rose and there were skills shortages which made life difficult for small to medium enterprises,” he said.

“The Government is not ensuring that enough housing lots are released.

“The industry is not building enough houses.

“We are storing up a problem for the future.”

Premier Colin Barnett had previously said there was a need to attract more skilled workers to WA and there needed to be more mobility of workers between States.

Deputy Prime Minister Julia Gillard said last month that interstate and international migration was needed to help fill future job vacancies.

Business has warned that West Australians could be priced out of the resources boom and interest rates pushed even higher if the Federal Opposition follows through with a promise to slash the number of immigrants.

WA Chamber of Commerce and Industry chief economist John Nicolaou said the flagged cut would mean the abandonment of major developments by companies unable to find the workers they need to exploit the State’s natural resources.

He was backed by Trade Minister Simon Crean who said cutting immigration now would devastate economies like that of WA and Queensland which were crying out for workers.

The Opposition has signalled cutting the net immigration intake which, when temporary workers and students are taken into account, edged down to 297,000 in the three months to the end of September.

Shadow immigration minister Scott Morrison said forecasts of Australia’s population reaching 36 million by 2050 proved immigration under the Rudd Government was “out of control”.

He said a coalition government would bring immigration levels back to a “sustainable level”.

But Mr Nicolaou said with WA needing 400,000 people over the coming decade to deal with the resources boom, cutting immigration levels could prove economically disastrous to the State.

He said major resource companies would go overseas if they could not get the labour they needed in Australia.

Those that did continue work in WA would have to pay higher wages for their staff, which would then push up costs for the rest of the community.

“I think it’s very short-sighted if they’re looking at cutting immigration, because it’s going to push up costs for everyone through wages going up,” he said.

“We lost investment in the last boom because there were insufficient workers, and we run the risk of doing that again.”

Professor Peter Mc Donald of the Australian Demographic and Social Research Institute also warned that trying to cap immigration levels would have major economic ramifications for people already living in Australia. The Reserve Bank was already lifting interest rates to dampen demand.

“You’re just going to push up wages pressures and that will feed into higher interest rates,” he said.

Mr Crean said the resource States would be disadvantaged if the number of workers was artificially restricted.

“Mining companies generally are saying one of the biggest challenges they face … is the availability of skilled labour,” he said. “People calling for cuts to immigration programs ought to understand how the economy is functioning.”